Just months left until the end of Life Insurance in Australia as we know it!
Now when The Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 has been passed by both Houses of Parliament we know the date when the old life insurance regulations will end - 1st of January, 2018.
And while Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP says it's a win for consumers this may have an opposite effect as the reform puts 13,500 life insurance advisers to a significant disadvantage and only benefits the profits of the banks and insurers.
How your choices will be affected after the reform?
The following will probably happen after the changes will be implemented:
- Fee-for-Service. Insurance advisers will be forced to charge a fee for their services driving life insurance costs up for consumers and deepening underinsurance problem in Australia.
- Less Reviews. Insurance advisers will be discouraged to review your insurance every year because of the clawed back commissions when you change the policy in the first 2 years.
- No Discounts. Discounts offered by LISA Group will no longer be available.
- Lower Competition. Smaller independent life insurance advisers will go out of business. That could be bad for competition because the big players channel about 60 to 70 per cent of clients into their own products.
- Bigger Price Difference. Lower competition means even bigger differences in price among insurance companies.
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